JAKA INVESTMENTS CORP vs CIR

G.R. No. 147629

July 28, 21
!IRST "IVISION
!ACTS AS TO PETITIONER
Petitioner proposed to subscribe shares of JEC through a tax-free exchange where in, as
payment for its subscription, petitioner assigned and transferred to JEC the shares from
RGHC, PGCI, CP!, and paid in cash the remaining ba"ance# $n $ctober %&, %''&,
petitioner the paid the ()*# Petitioner, after seeing the R($+s certifications, the tota" amount
of which was "ess than the actua" amount it had paid as documentary stamp tax, conc"uded
that it had o,erpaid# Petitioner subse-uent"y sought a refund# Petitioner+s contends that the
tax base for the documentary stamp tax shou"d ha,e been on"y the shares of stoc. in RGHC,
PGCI, and CP! that petitioner had transferred to JEC as payment for its subscription to the
JEC shares, and not the cash component of the payment for its subscription to the JEC
shares
!ACTS AS TO RESPON"ENT
$n $ctober %%, %''/, petitioner fi"ed a petition for refund before the C*0 doc.eted as C#*#0#
which was denied in a (ecision
1
dated January %', %'''# *he C*0 "i.ewise denied
petitioner+s 2otion for Reconsideration# Petitioner appea"ed to the Court of 0ppea"s which
sustained the C*0# Respondent maintains that the ()* imposed is on the origina" issue of
certificates of stoc. of JEC on the subscription by the petitioner and not on the shares of
stoc. owned by petitioner in RGHC, PGCI, and CP!, which mere"y form part of the partia"
payment of the subscribed shares in JEC#
ISS#E RAISE" $% PETITIONER
Petitioner argues that the ()* computation shou"d not inc"ude the cash component as part
payment to its subscription in JEC shares#
ISS#E RAISE" $% RESPON"ENT
Respondent argues that the ()* computation shou"d be imposed is on the origina" issue of
certificates of stoc. of JEC on the subscription by the petitioner#
R#&ING O! T'E S#PREME CO#RT
*he )upreme Court ru"ed in fa,or of respondent#
0 documentary stamp is "e,ied upon the pri,i"ege, the opportunity and the faci"ity offered at
exchanges for the transaction of the business# *his being the case the documentary stamp
tax imposition is essentia""y addressed and direct"y brought to bear upon the document
e,idencing the transaction of the parties which estab"ishes its rights and ob"igations, which in
the case at bar, was estab"ished and enforceab"e upon the execution of the 0mended
)ubscription 0greement and (eed of 0ssignment of Property in Payment of )ubscription#
*he documentary stamp tax is imposed on the entire subscription which is the amount of the
capita" stoc. subscribed whether fu""y paid or not# It connotes an origina" subscription
contract for the ac-uisition by a subscriber of unissued shares in a corporation#
!OR PEN
%# 0 documentary stamp tax is in the nature of an excise tax# It is not imposed upon the
business transacted but is an excise upon the pri,i"ege, opportunity or faci"ity offered
at exchanges for the transaction of the business# It is an excise upon the faci"ities
used in the transaction of the business separate and apart from the business itse"f#
(ocumentary stamp taxes are "e,ied on the exercise by persons of certain pri,i"eges
conferred by "aw for the creation, re,ision, or termination of specific "ega"
re"ationships through the execution of specific instruments#
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